NBER Working Papers and Publications

Using US Census data for 1990-2000, we estimate effects of NAFTA on US wages, focusing on differences by gender. We find that NAFTA tariff reductions are associated with substantially reduced wage growth for married blue-collar women, much larger than the effect for other demographic groups. We investigate several possible explanations for this finding. It is not explained by differential sensitivity of female-dominated occupations to trade shocks, or by household bargaining that makes married women workers less able to change their industry of employment than other workers. We find some support for an explanation based on an equilibrium theory of selective non-participation in the labor market, whereby some of the higher-wage married women workers in their industry drop out of the labor m...

Using US Census data for 1990-2000, we estimate effects of NAFTA on US wages. We look for effects of the agreement by industry and by geography, measuring each industry's vulnerability to Mexican imports, and each locality's dependance on vulnerable industries. We find evidence of both effects, dramatically lowering wage growth for blue-collar workers in the most affected industries and localities (even for service-sector workers in affected localities). These distributional effects are much larger than aggregate welfare effects estimated by other authors. In addition, we find strong evidence of anticipatory adjustment in places whose protection was expected to fall but had not yet fallen; this adjustment appears to have conferred an anticipatory rent to workers in those locations.